In economics, dual-self models deal with the inconsistency between the patient long-run self and myopic short-run self. With respect to savings behavior, Thaler and Shefrin (1981) introduced the concepts of the farsighted planner and myopic doer. At any point in time, there is a conflict between those selves with two sets of preferences. The approach helps economic theorists overcome the paradox created by self-control in standard views of utility. The more recent dual-self model of impulse control (Fudenberg & Levine, 2006) explains findings from the areas of time discounting, risk aversion, and self-control (see also intertemporal choice). More practically-oriented research on savings behavior has attempted to make people feel more connected to their future selves, making them appreciate that they are the future recipients of current savings. In an experiment, participants who were exposed to their future (as opposed to present) self in the form of an age-progressed avatar in virtual reality environments allocated twice as much money to a retirement account (Hershfield et al., 2011).

 

Fudenberg, D., & Levine, D. K. (2006). A dual-self model of impulse control. American Economic Review, 96(5), 1449-1476.

Hershfield, H. E., Goldstein, D. G., Sharpe, W. F., Fox, J., Yeykelvis, L., Carstensen, L. L., & Bailenson, J. (2011). Increasing saving behavior through age-progressed renderings of the future self. Journal of Marketing Research, 48, 23-37.

Thaler, R. H., & Shefrin, H. M. (1981). An economic theory of self-control. Journal of Political Economy, 89(2), 392-406.

 

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